How Much Can You Save in 2014?

Each year, the IRS determines how much you can contribute to various retirement accounts and how much you can deduct, depending on your age and income.

Contributions

Basic contribution rules are pretty simple.

If you are under 50 years of age at the end of the calendar year, you may be able to contribute up to $5,500 or 100% of your earned income, whichever is less, to a Traditional or Roth IRA in 2014. Your contributions can be split between a Traditional IRA and a Roth IRA, but the combined limit is $5,500. You can also contribute up to $17,500 to a 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.

If you are 50 years of age or older at the end of the calendar year, you may be able to contribute up to $6,500 or 100% of your earned income, whichever is less. Again, you can split your contributions between a Traditional IRA and a Roth IRA, but the combined limit is $6,500. Like people under 50, you can contribute up to $17,500 to a 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan. However, you can also contribute an additional $5,500 in “catch-up contributions.”

However, for people of all ages, the amount of money you contribute to a Roth IRA may be reduced depending on your modified adjusted gross income (AGI).

If you have taxable compensation and your filing status is…

And your modified AGI is…

Then…

married filing jointly or qualifying widow(er)

less than $181,000

you can contribute up to the contribution limit.

at least $181,000 but less than $191,000

the amount you can contribute is reduced.

$191,000 or more

you cannot contribute to a Roth IRA.

married filing separately and you lived with your spouse at any time during the year

$0

you can contribute up to the contribution limit.

more than $0 but less than $10,000

the amount you can contribute is reduced.

$10,000 or more

you cannot contribute to a Roth IRA.

single, head of household, or married filing separately and you did not live with your spouse at any time during the year

less than $114,000

you can contribute up to the contribution limit.

at least $114,000 but less than $129,000.

the amount you can contribute is reduced.

more than $129,000

you cannot contribute to a Roth IRA.

Deductions

The deductible portion of your Traditional IRA contribution may also be reduced depending on your modified AGI.

If you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction.

If your filing status is…

And your modified AGI is…

Then you can take…

married filing jointly or qualifying widow(er)

less than $96,000

a full deduction up to the amount of your contribution limit.

at least $96,000 but less than $116,000

a partial deduction.

$116,000 or more

no deduction.

single or head of household

less than $60,000

a full deduction up to the amount of your contribution limit.

at least $60,000 but less than $70,000

a partial deduction.

more than $70,000

no deduction.

married filing separately*

less than $10,000

a partial deduction.

$10,000 or more

no deduction.

If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the amount of your deduction.

If your filing status is…

And your modifiedAGI is…

Then you can take…

single, head of household, or qualifying widow(er)

any amount

a full deduction up to the amount of your contribution limit.

married filing jointly or separately with a spouse who is not covered by a plan at work*

any amount

a full deduction up to the amount of your contribution limit.

married filing jointly with a spouse who is covered by a plan at work

less than $181,000

a full deduction up to the amount of your contribution limit.

at least $181,000 but less than $191,000

a partial deduction.

more than $191,000

no deduction.

married filing separately with a spouse who is covered by a plan at work*

less than $10,000

a partial deduction.

$10,000 or more

no deduction.

* If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "Single" filing status.

The tax information contained herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

* If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the "Single" filing status.

The tax information contained herein is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.